What Can Portland Learn from the Bay Area?

The following post is by Nick Christensen, a member of the Metro staff.

Rents are soaring. Longtime tenants are being forced to look for a new home. And house prices are approaching record levels.

It’s a story long familiar to residents of the San Francisco Bay Area and New York City – and increasingly, it’s an issue in the Portland region.

About 175 people attended a lecture and discussion at the Metro Regional Center on Friday as the Portland region looks to address affordable housing, and avoid the fate of other cities.

The poster child for unaffordable housing is the Bay Area, where job growth has far outpaced housing construction, and the gap between housing haves and have-nots has become a wedge dividing the region.

Journalist Kim-Mai Cutler, who has written about the Bay Area’s housing crunch, laid out a vision the Portland region undoubtedly wants to avoid: Protective suburbs that won’t build multifamily housing, forcing all the growth to far-flung exurbs or super-expensive cities.

Watch a video of Cutler’s presentation:

“That growth goes somewhere else. It ends up on the urban core, and the exurban periphery,” Cutler said.”Residents are concerned about schools. They don’t want more kids in the schools. Cupertino has some of the best-performing high schools in the country,” Cutler said of the suburban Silicon Valley home of Apple. “So people are saying ‘Please stop Condo-tino. We don’t want more housing.’ The other suburbs surrounding Cupertino are saying the same thing.

The growth in the urban core – in this case, San Francisco, where the electorate has been loath to add new housing – has caused longtime residents to be priced out of the market, creating concerns about the preservation of the city’s character.

But preservation and affordability come at a cost: One affordable apartment building in San Francisco cost nearly $900,000 per unit to build, because of the $18.5 million cost of the land under the building. A proposed $300 million bond would help pay for 500 units of affordable housing.

And those efforts, in turn, only help lower-income residents in a city increasingly dominated by high-income residents, squeezing out the middle class.

San Francisco’s situation is an extreme scenario caused by unique circumstances. But a panel of local experts, moderated by Willamette Week journalist Aaron Mesh, said they think there are some tools that could be used to avoid the Bay Area’s dystopian housing future.

“Given the fact that literally thousands of people are receiving $100 rent increases or really drastic rent increases, rent control helps relieve that because if not, we are going to lose folks,” Harrigan said. “Even the suburbs are experiencing traumatic rent increases. Vancouver is looking at taking some short-term action on that.”

But Joe Cortright, economist and founder of the Portland-based think tank City Observatory, said rent control doesn’t work for people who don’t live in an apartment with rent control – anyone who moves to a city after rent control goes into effect.

“The negative effects of rent control in terms of stifling production of additional housing essentially does two things: It constricts the supply of housing, and it drives up the price for everybody else,” Cortright said.

“The 47 percent think they do OK,” Cortright added, referring to the share of San Francisco apartments that are under rent control.

Cortright said he thinks property taxes need to be more directly linked to land values. And, he said, more money is needed to build affordable housing.

“We have to invest money in additional housing supply and that’s extremely expensive. But bond measures create funding,” Cortright said. “Portland’s policy of using (tax-increment financing) money to actually build housing is the right thing to do.”

He also pointed out that Portland already has built quite a bit of affordable housing, including 2,300 units in the Pearl District. That’s more affordable housing, Cortright said, than has been produced in San Francisco in the last 20 years through inclusionary zoning policies.

Eli Spevak, owner of Portland-based tiny house contractor Orange Splot, said zoning regulations need to be rolled back to make it easier to build homes in more places.

“I think we need to figure out ways we can build more affordable housing, and let the market do it, and we have a great history of doing that in Portland,” Spevak said.

Cortright said one of the simplest fixes would be to remove parking requirements on new developments.

“Parking requirements trump zoning almost anywhere, and they drive up the price of housing,” he said. “We have inclusionary zoning for cars.”

But efforts by some neighborhoods to preserve their character have led to pushback on any changes to predominant development types.

“Is the fetishization of neighborhood character ruining Portland?” Mesh asked.

Cortright pointed out how Portland is one of the most income-integrated metropolitan areas in the country, helping prepare the region to meet future challenges.

He credited Metro with some of that success.

“Unlike California, every jurisdiction in the Portland area has to zone for a mix of housing types, and it has to include multifamily,” Cortright said. “That’s the right principle. The region should have a mix of housing types in every jurisdiction.”

Cutler said neighborhood power has been a tremendous hurdle to new development in San Francisco. She said incumbent residents run neighborhood associations and make it hard for new development to happen.

“A small number of people have a big negative effect, they show up to these (neighborhood association) meetings in the middle of the day,” Cutler said. “The larger mass of people that might want more housing aren’t there.”

As the two-hour event wrapped up, Mesh asked the panelists what their proposed silver-bullet solution would be for the region’s affordability issue.

Cortright said to abolish all parking requirements, and price street parking. Spevak suggested creating “something legal that you can live in that’s less expensive than most affordable housing.” Harrigan said she’d like to see a dedicated revenue source for affordable housing, to improve rental stability and helping buy homes.

The next discussion in Metro’s Regional Snapshot speaker series is scheduled for Oct. 19, when Scott Bernstein of the Center for Neighborhood Technology, an expert on measuring the combined costs of housing and transportation, is scheduled to speak at the Metro Regional Center.